NAB FX Strategy Research notes that its fair value models estimate for AUD/USD has fallen by less than a cent so far this month and that the largest contribution to the fall by far coming from oil prices.
As such, NAB argues that investors should probably look to commodity price volatility for clues on near term AUD direction.
Beyond that, NAB notes that AUD drivers as we get into Q2 will shift towards whether or not the Fed will make its next move as early as June along with the state of play regarding US tax reform.
"All up, we continue to look for AUD slippage in coming months from one or more of these influences," NAB argues.
NAB targets AUD/USD at 0.75, 0.73, and 0.70 by the end of Q2, Q3, and Q4 respectively.
AUD/USD is trading circa 0.7635 as of writing.
Source: NAB ResearchOriginal Article
